Analysis of transactions and trading tips on GBP/USD
The test of 1.2497 earlier in the day, coinciding with the drop of the MACD line from zero, prompted a sell signal that led to a price decrease. It followed an unsuccessful attempt to return to an uptrend in the wake of good labor market statistics in the UK. According to the report, the number of jobless claims significantly decreased, while average earnings increased. This caused a surge in pound's value, but major players did not support this, fueling the decline. This may lead to the pair retesting the monthly lows.
Data related to the NFIB Small Business Optimism Index will come out in the US, but it will not provoke significant impact to dollar.
For long positions:
Buy when pound hits 1.2491 (green line on the chart) and take profit at the price of 1.2535 (thicker green line on the chart). Growth will occur if traders defend local lows and if data from the US come out weaker than expected. However, when buying, ensure that the MACD line lies above zero or rises from it.
Pound can also be bought after two consecutive price tests of 1.2463, but the MACD line should be in the oversold area as only by that will the market reverse to 1.2491 and 1.2535.
For short positions:
Sell when pound reaches 1.2463 (red line on the chart) and take profit at the price of 1.2436. Pressure may persist if buyers remain inactive at daily lows. However, when selling, make sure that the MACD line lies below zero or drops down from it.
Pound can also be sold after two consecutive price tests of 1.2491, but the MACD line should be in the overbought area as only by that will the market reverse to 1.2463 and 1.2436.
What's on the chart:
Thin green line - entry price at which you can buy GBP/USD
Thick green line - estimated price where you can set Take-Profit (TP) or manually fix profits, as further growth above this level is unlikely.
Thin red line - entry price at which you can sell GBP/USD
Thick red line - estimated price where you can set Take-Profit (TP) or manually fix profits, as further decline below this level is unlikely.
MACD line- it is important to be guided by overbought and oversold areas when entering the market
Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes.
And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader.
